An increasing number of business employers are foregoing social insurance payments and other taxes to keep their businesses afloat in economic hard times.Civil Court Magistrate Juan Wolffe said it has become “a huge problem in Bermuda” in recent years.And while a lot of it is dealt with by the Debt Enforcement Unit in the Attorney General’s Chambers, the extent of the problem is also huge in his court.Said Mr Wolffe: “If you don’t pay social insurance, what about pensions? I’m seeing reputable companies that are not paying their social insurance for instance.“Then when an employee reaches the age of 65 and goes to check up on their pension money they find that nothing was being paid in, then what?”Although employers are required to pay social insurance premiums under the law, in reality, the onus is on the employee to ensure those payments are in fact being made.Asked if that’s fair for the onus to be on the employee instead of the employer, Mr Wolffe replied: “I don’t think that’s fair at all.“There’s already a Debt Enforcement Unit which deals with that, and I’m pretty sure they are addressing it. Outside the court they work out payment schedules with the owners of these companies to pay off these things.“There is no sort of ‘I’m not paying just because I’m not going to pay’ type of thing going on,” he said.Despite efforts to get the number of companies on payment schedules arranged by the Debt Enforcement Unit, no information was made available at press time.A recent Civil Court session also revealed that it’s not unusual to hear complaints regarding the fees attached to outstanding bills.In some cases the new debt ended up much higher than the original bill once it went through debt collection agencies.It is an issue that prompted the former PLP Government to issue a Throne Speech promise to deliver legislation to regulate Bermuda’s debt collection agencies.To date, there is no law on the books specifying just how much they are allowed to charge for the administrative fees they attach to outstanding bills.Mr Wolffe agreed it is an issue that must be addressed, he supports the need for statutory regulations.“Collection fees are always in the discretion of the judge, but there’s no set amount in law. I think there should be some regulation, some statutory regulation on the interest that collection agencies should charge,” said Mr Wolffe.“There is a statutory rate of seven percent that can be attached to a judgement debt, but that only becomes a judgement debt when I actually make that order.“By the time it comes to court the collection agencies have already put on their interest. Unless it’s really something outstanding to me, would I question it? — that varies.“But the average amount is about 25 to 30 percent which is certainly the limit of what I would think should be charged.”With no statutory regulations he said he would know about overcharges unless “the judgement debtor or the person who owes the money says something”.“Unless they ask how did it get to this point, only then would I definitely question the agency or the lawyers about how it got to that point and I often will adjust it downwards, depending on what the circumstances are.“The law does provide, in some cases it’s contractual, where collection costs can be claimed for in a case. The question for me is to determine whether or not those collections costs in the circumstances are proportional to the debt that’s owed.“But ideally, I would support having regulations, most definitely,” said Mr Wolffe.“There have been times when I thought the fees attached to a bill were exorbitant and in other jurisdictions there are set rates which makes sense because lawyers have set guidelines to follow when they come to Magistrates’ Court.“There is a guideline or a schedule with a set amount which can be claimed back for legal costs,” said Mr Wolffe.“While a lawyer may charge let’s say $500 per hour, the court will not grant them legal costs at that rate.“There’s a very clear schedule within the Act that talks about how you can only get, say $100, for every half-hour or hour.“So there’s legislation in place for lawyers even to curtail their fees when they come to court or what they can claim back.“But there isn’t any such provisions for collection agencies in Bermuda and I think that there probably should be.“That’s not to say that there’s a great, huge amount of abuse that takes place among the collection agencies, but there certainly are instances which I think number too many.”There are also bills that end up in court that never get paid.Two inmates serving lengthy prison terms were hauled into Civil Court last week for unpaid hospital bills they incurred before incarceration.One inmate’s bill was just over $3,000 for a bill dating back to 2003, he has been incarcerated since 2006 and is not scheduled for release until 2016.Another inmate due for release this month was told that he will have to work out a payment schedule when he gets out of prison for a $1,352 hospital bill.Mr Wolffe said he deals with quite a few inmates with outstanding debts still owed while they’re in jail.“Depending on the amount that’s owed, I try to convince, if I can, the creditor to, if they can, forgive the debt. Sometimes they do, sometimes they don’t, it really depends on the circumstances,” he said.He concluded: “At the end of the day they’re not going to get that money back anytime soon, so why leave that hanging.“Or at the very least I would try to convince them to remove the interest that may accrue while the person is incarcerated.”